Currently, in the recent years. The origin of regionalism

Currently, there are over 200
regional agreements are in existence with highly varied content and a rich
array of geographical configurations. The is a tremendous increase in the number
of agreements in place over the past few years reflecting both an increase in
the number of agreements per country as well as an increase in the number of countries participating in trade. There
is a strong academic debate about the value of regional integration as represented
by the numerous agreements. Some observers believe that regionalism is
complementary to globalisation and will lead to a stable equilibrium. Others
believe that the growing number of these agreements is a cause for concern – “concern
about incoherence, confusion, unnecessary business costs, instability, and unpredictability
in trade relations,” (Baldwin & Low, 2009)

Regionalism is not a new
phenomenon, though there is a consensus
that incidence of regionalism has exploded in the recent years. The origin of
regionalism can be traced back to the formation of European Economic Community
(EEC) in 1958 with six member countries – France, Germany, Belgium, Italy,
Luxembourg and the Netherlands. It was originally proposed by France to Germany
in order to form a common authority for the steel industry. Another European Block
EFTA, with seven members, was formed in 1968 in order to counter EEC. EFTA was led
by the UK in the hope that it would
retain sovereignty over trade policy while benefiting from a larger market. However, this initiative was not
successful and the UK later joined the
EEC as well (Carpenter, 2009). EEC led the
foundation stone for the formation of the present-day
European Union. At the time, perceived to be political instruments, many
agreements were signed between 1955-74 by the developing nations on the ideological basis with little regard to trade
concessions. For example, a tripartite agreement was signed between India,
Yugoslovakia and Egypt – the leaders of these countries were pioneers of the Non-aligned
movement. In 1967, ASEAN was formed with five members with a primary security motive, but in 1978 a trade
dimension was added to the agreement. In Latin America, LAFTA was formed which
envisioned the establishment of a Latin American free trade area and common
market.

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It was during the 1980s that
regionalism truly expanded and deepened. In Europe, EC laid plans for
completing the move to a Single European Market for goods, services, capital
and labour. These plans instilled concerns in the rest of the world about the creation of a ‘Fortress Europe’ and that EC would
trade lesser with outsiders. These concerns led to the formation of CUSFTA with
the United States and Canada. In the
1990s MERCOSUR countries were established
led by Brazil and they entered into many Free Trade Agreements with partner
countries. During this period, there was a clamour among nations to enter into
FTAs with select trade partners.

Compared to the first wave of
regionalism, which mainly addressed issues of political stability and security,
the second wave has deeper economic integration, and efforts have been made for
greater trade and investment liberalisation (Cohn, 2012). The current
structure of EU, the North American Free Trade Agreement (NAFTA), major trade
agreements of Asia-Pacific Economic Co-operation (APEC), the efforts to
integrate Southeast Asian nations, and the South-to-South integration initiatives
are all more focused on economic cooperation
and trade.

EU represents the most
complex regional integration initiative (RIA) with the establishment of a political structure for overseeing the
harmonization of economic, social and political policies (Study Guide: Unit 6:
Regionalism and Globalization). However, Brexit poses a question about the
stability of the zone. EU has withstood many threats to its member nations
during the recession. EU is formed on the foundation of neo-liberal policies; however,
it is flexible in its approach due to the political institutions in place (van Apeldoorn, 2006). With the adoption
of monetary union, and due to its social charter and political institutions, EU
is much more than a trade and investment agreement. It is an attempt to forge a
European identity. This allows EU to weigh the benefits and detriments of
globalisation and if needed take a resistant stand against globalisation.

Unlike the EU, NAFTA
comprising of the United States, Canada and Mexico are purely economic
agreements. It does not have socio-political institutions that will address the
issues faced by the member countries. Also, NAFTA lacks the financial resources
to deal with economic restructuring. The unique feature of NAFTA is the inclusion
of a developing nation along with two most developed nations of the world.
There is a strong debate about which country benefits the most and loses the
most under NAFTA and there is a constant
tension between the three nations. Currently, the issues within NAFTA are
addressed on a case-to-case basis with a short-term view. There is a need for
comprehensive, long-term framework in order to make NAFTA more than just a
trade agreement.

UNASUR (the Union of South
American Nations) and ALBA (the Bolivarian Alliance for the Peoples of Our
America) represent the recent south-to-south RIA in the Americas. Both these
alternatives have emerged as “alternatives” to deal with economic and
commercial exchange (Rodriguez, 2008). UNASUR aims the
creation of a single market, infrastructure and energy co-operation, the
creation of the Bank of the South, and the creation of the South American
Defence Council to serve as a mechanism for regional security. ALBA is based on
a vision of a social welfare, bartering and mutual economic aid. The
interesting aspect of these blocs is the absence of any developed member
nation.

Southeast Asia has witnessed
the transformation of ASEAN (the Association of Southeast Asian Nations) as an
economic free-trade area in the twenty-first century. The 1.9 billion member
ASEAN is led by China and is the third largest trading bloc in the world.

Regional integration can be
seen the least in Africa, the Middle East and South Asia. Though there have
been numerous attempts in these three regions for formation of blocs, they have
not been very successful. The African Unity entered into force in 1994 and
signalled the attempt of the African nations in joining the trend of regional
economic integration. Similarly, in the Middle East, the Gulf Cooperation
Council (GCC), comprising of six-member states was formed. In South Asia, South
Asian Association for Regional Cooperation (SAARC) was formed with eight member
states, comprising of 1.5 billion people. Though the regional integration in
these regions is not as strong as that in EU, NAFTA or ASEAN, the growing trend
is to move towards regional integration.

Hirst, Thompson and Bromley
have provided the viewpoint that the world, in fact, is moving towards ‘Supranational
Regionalisation’ and not towards globalisation (Hirst, et al., 2009). If this theory
holds true, it means that the there is no unified world economy, rather there
are a series of unified regions. They argue that the world is divided into
three significant regional blocs – North America, Europe and Asia-Pacific
(mainly East Asia). They substantiate this theory by providing evidence that
the bulk of international trade happens within each region and that financial
borrowing by economies is seldom
cross-border across regions.

From the above paragraphs, it
is clear that the origins, motivations and goals for regionalism are
multilayered and complex. They span across numerous factors such as political,
cultural, economic, geographic or military reasons. What is evident though is
that the growth of RIAs has not hampered the growth of globalisation so far (Carpenter, 2009). However, with
deeper integration and formation of RIAs, which call for an identity beyond the
nation-state, regionalism has the potential to thwart the growth of
globalisation. Or with the proposed theory of ‘supranational regionalisation,’
there is also the probability that globalisation as it is currently defined
never existed and it was confused with supranational regionalisation.